Pictometry Int'l Corp. v. Air Am. Flight Ctr., LLC

394 F.Supp.3d 320

PICTOMETRY INTERNATIONAL CORP., Plaintiff,

v.AIR AMERICA FLIGHT CENTER, LLC, Defendant.

Air America Flight Center, LLC, Third-Party Plaintiff,

v.Eagle View Technologies, Inc., Sandhills Aviation LLC, and Steven W. Sherwood, Third-Party Defendants.

6:18-CV-6487 EAW

United States District Court, W.D. New York.

Signed August 20, 2019

Ashley Littlefield, Pro Hac Vice, Austin Klar, Pro Hac Vice, Mark McKane, Pro Hac Vice, Kirkland & Ellis LLP, San Francisco, CA, Tony R. Sears, Thomas S. D'Antonio, Ward Greenberg Heller & Reidy LLP, Rochester, NY, for Plaintiff.

Jessica Greer Griffith, Joseph B. Evans, Michael Robert Huttenlocher, McDermott Will & Emery LLP, New York, NY, for Defendant.

DECISION AND ORDER

ELIZABETH A. WOLFORD, United States District Judge

INTRODUCTION

Plaintiff Pictometry International Corp. ("Pictometry") commenced the instant action on June 29, 2018, asserting claims of breach of contract, anticipatory breach of contract, unjust enrichment, and conversion against Defendant Air America Flight Center, LLC ("Air America"). (Dkt. 1). On September 4, 2018, Air America commenced a separate action against third-party defendants Eagle View Technologies, Inc. ("Eagle View"), Sandhills Aviation LLC ("Sandhills"), and Steven W. Sherwood ("Sherwood"), which was opened as Civil Action No. 18-cv-6637 (the "6637 Action"). Air America also asserted counterclaims against Pictometry in the instant matter. (Dkt. 59). The parties thereafter consented to consolidation of the instant matter and the 6637 Action (Dkt. 68), and the Court ordered that the matters be consolidated on February 8, 2019 (Dkt. 69).

Currently pending before the Court are Pictometry's motion to dismiss certain of Air America's counterclaims for failure to state a claim (Dkt. 63), Eagle View's identical motion to dismiss certain of the claims asserted in the 6637 Action (6637 Action, Dkt. 17), and Sandhills' and Sherwood's motion to dismiss the Complaint in the 6637 action for lack of jurisdiction and, as to certain claims, for failure to state a claim (6637 Action, Dkt. 16). For the reasons that follow, the Court denies the motions in part and grants them in part. In particular, the Court grants Pictometry's and Eagle View's motions as to Air America's claims under the Florida Deceptive and Unfair Trade Practices Act (the "FDUTPA") and as to Air America's claims for breach of oral contract. The Court grants Sandhills' and Sherwood's motions as to Air America's FDUTPA claims and as to Air America's claim against Sherwood for aiding and abetting a breach of the duty of loyalty. The motions are denied in all other respects.

BACKGROUND

I. Factual Background

The following facts are taken from Air America's counterclaims in the instant action and the Complaint in the 6637 action. As is required at this stage of the proceedings, the Court treats Air America's allegations as true.

Air America is a Florida-based limited liability company that provides "aircraft fleet management and logistics services for the deployment of aerial imaging equipment." (6637 Action, Dkt. 1 at ¶¶ 23, 34). Beginning in 2005, Air America entered into a business relationship with Pictometry, which is an aerial imagery company. (Id. at ¶ 35). Air America and Pictometry entered into a series of successive contracts known as Air Services Agreements ("ASAs"), pursuant to which Pictometry hired Air America to provide aircraft and manage the logistics necessary to collect aerial images for Pictometry. (Id. at ¶ 36). The last ASA between Pictometry and Air America was entered into in September 2015. (Id. ). In 2013, Pictometry merged with Eagle View. (Id. at ¶ 42; Dkt. 59 at ¶ 4). On July 26, 2018, Eagle View announced that it had acquired Spookfish, an Australian technology company. (6637 Action, Dkt. 1 at ¶¶ 46, 49).

Air America hires pilots from around the world to serve as independent contractors. (Id. at ¶ 51). Sherwood was hired by Air America as a pilot on October 15, 2008. (Id. at ¶ 52). Sherwood served as an independent contractor pilot from October 15, 2008, through October 26, 2009, and then again from April 25, 2011, to January 25, 2012. (Id. at ¶ 54). He was assigned to fly aircraft for Pictometry projects and to capture images for Pictometry. (Id. at ¶ 53).

On October 8, 2012, Sherwood was hired by Air America as Assistant Director of Business Development. (Id. at ¶ 55). In this role, Sherwood oversaw human resources and was responsible for hiring and training pilots. (Id. at ¶ 57). Sherwood had significant involvement in Air America's relationship with Pictometry, and he was responsible for "generally maintaining the relationship between Air America and Pictometry." (Id. at ¶¶ 57-58). Pictometry was Air America's largest customer, and "Air America placed substantial trust and confidence in Mr. Sherwood to fulfill Pictometry's needs and to maintain the relationship between Air America and Pictometry." (Id. at ¶ 62).

While employed by Air America, Sherwood was "taught Air America's methods for deploying aircraft," including Air America's proprietary method for providing a higher number of reliable flight hours than its competitors. (Id. at ¶ 58). Sherwood also became aware of the following confidential Air America information: "(i) internal policies on screening, hiring, training, and managing pilots; (ii) Air America's practices on creating and executing flight routes; (iii) Air America's expertise on managing complicated flight projects and the corresponding maintenance schedules of the Aircraft; (iv) Air America's nationwide rosters of independent contractor pilots and mechanics; and (v) Air America's practices for servicing and maintaining the Pictometry account." (Id. at ¶ 63).

While still employed by Air America, Sherwood entered into an agreement with Pictometry and Eagle View to "take the confidential information and methods Mr. Sherwood learned at Air America to start a competing aircraft fleet services vendor for the purpose of diverting revenue and profits away from Air America," through a new company called Sandhills. (Id. at ¶ 64). Sherwood resigned from Air America on October 9, 2014, and told Air America his resignation was for "personal reasons." (Id. at ¶ 68). However, the true reason was to start a business to compete with Air America, at the direction of Pictometry and Eagle View. (Id. at ¶ 69). Indeed, "[a]s late as October 29, 2016, the Sandhills website stated: Sandhills Aviation was founded in May of 2015, as a direct response to a request by Eagleview/Pictometry for the need to bring on additional vendors for the purpose of data acquisition." (Id. at ¶ 83 (internal quotation omitted)). Air America reviewed Sherwood's email account and electronically stored information after his resignation. (Id. at ¶¶ 77-78). Air America discovered that Sherwood had deleted all of the emails (including sent emails). (Id. at ¶¶ 79-81).

Sherwood attempted to recruit Air America's pilots and personnel to his new business venture. (Id. at ¶ 69). For example, Sherwood recruited David Smith ("Smith"), who had worked for Air America as an independent contractor primarily assigned to the Pictometry account, to become a founding member of Sandhills. (Id. at ¶¶ 70-74). Sherwood or Smith also recruited Michael Herbert and James Szydlowski, former Air America pilots. (Id. at ¶ 76). "Sandhills has been wrongfully using Air America's confidential information and trade secrets since its inception to the present day to compete with Air America." (Id. at ¶ 88). Moreover, Sandhills has assumed a significant amount of business with Pictometry that would have otherwise been handled by Air America, causing Air America to lose approximately $190,000 in business per month. (Id. at ¶¶ 92-96).

On April 21, 2016, Air America and Pictometry had a meeting at which "Pictometry promised Air America that Air America would be Pictometry's exclusive Air Services provider for projects involving deployment of Spookfish technology." (Id. at ¶¶ 98-99). Air America verbally accepted this exclusivity offer and, in reliance thereon, "performed certain tasks for Pictometry without a written contract." (Id. at ¶¶ 100-101). In particular, Air America recommended to Pictometry that it use a Piper Aztec aircraft to deploy the Spookfish technology and advised Pictometry and Spookfish personnel regarding the necessary modifications to the aircraft. (Id. at ¶¶ 103-105).

In March of 2017, Air America installed a Spookfish technology "pod" on a Piper Aztec (the "Spookfish Airplane"). (Id. at ¶ 107). The installation involved complicated modifications to the aircraft and required approval by the Federal Aviation Administration. (Id. ). Innov.aero, a company working with Pictometry and Spookfish, documented the procedures for installing the pod on the Spookfish Airplane, which Air America understood was being done to create a manual for future installations. (Id. at ¶ 108). "Because Pictometry had promised Air America exclusivity for Spookfish Technology projects, Air America fully understood and believed that the manual was going to be kept confidential and used for future installations of additional Spookfish Pods upon Air America aircraft." (Id. ). Pictometry was not involved in the installation of the pod onto the Spookfish Airplane. (Id. at ¶ 109).

After installation of the pod onto the Spookfish Airplane, Air America and Pictometry conducted a number of test flights, after which Air America remedied mechanical failures in the pod. (Id. at ¶ 110). Air America was not involved in installing Spookfish pods onto any other aircrafts. (Id. at ¶ 111).

In 2017, Air America became aware that Pictometry had deployed up to 10 additional Spookfish pods onto other aircraft, using vendors other than Air America. (Id. ). Pictometry and Sandhills have installed a Spookfish pod on one of Sandhills' airplanes, using the methodology devised by Air America. (Id. at ¶¶ 112-113).

Beginning in late 2017, Air America and Pictometry...